UK charities could lose out over EU cross-border donations rule

European Foundation Centre data shows nine member states have placed limits on tax relief

Twelve countries in the European Union have not complied with a European directive that requires them to give tax relief on donations their taxpayers make to charities in the UK and other EU countries, according to data from the European Foundation Centre, a support network for European foundations.

The UK is among 15 countries that have put into effect a commission ruling that governments in the EU cannot discriminate in their tax arrangements against donations made across national borders. But the EFC analysis shows that nine of the 15 have limited the relief, meaning foreign donations to UK charities are likely to attract less tax relief than donations made in the UK to foreign charities.

Hanneke de Bode, senior advisor on European affairs at Euclid, the European third sector leaders network, said that in the UK, tax relief went to charities, whereas in most other countries it went to donors. She said the Treasury could end up paying rebates to foreign charities, but UK charities would not receive cash from abroad.

Clive Cutbill, head of philanthropy at law firm Withers, said the new rules offered advantages to UK charities. "Donors in foreign countries will be able to claim tax relief on their donations to UK charities, which will make it easier for the UK third sector to recruit donors from abroad."

CROSS-BORDER-DONATIONS - WHO IS COMPLYING?

YES

1 United Kingdom 2 Belgium 3 Luxembourg 4 Netherlands 5 Poland 6 Slovenia

YES (with restrictions)

7 Austria 8 Bulgaria 9 Cyprus 10 Denmark 11 Finland 12 France 13 Germany 14 Italy 15 Portugal

YES (from 2011)

16 Estonia 17 Latvia

NO

18 Czech Republic 19 Greece 20 Hungary 21 Ireland 22 Lithuania 23 Malta 24 Romania 25 Slovakia 26 Spain 27 Sweden.

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